TJFA, L.P. v. Tex. Comm'n on Envtl. Quality

632 S.W.3d 660

TJFA, L.P.; Environmental Protection in the Interest of Caldwell County; James Abshier; and Bryon Friedrich, Appellants

v.TEXAS COMMISSION ON ENVIRONMENTAL QUALITY and 130 Environmental Park, LLC, Appellees

NO. 03-19-00815-CV

Court of Appeals of Texas, Austin.

Filed: July 23, 2021

Eric Allmon, Wallace B. Jefferson, Austin, Melanie Plowman, Houston, Marisa Perales, Austin, for Appellant TJFA, L.P.

Eric Allmon, Marisa Perales, Austin, for Appellant Friedrich, Bryon, Abshier, James, Environmental Protection in the Interest of Caldwell County.

Brent W. Ryan, Michael S. Truesdale, Austin, for Appellee 130 Environmental Park, LLC.

Priscilla M. Hubenak, Austin, for Appellee Texas Commission on Environmental Quality.

Before Justices Goodwin, Triana, and Smith

OPINION

Edward Smith, Justice

This dispute concerns 130 Environmental Park, LLC's (130 EP) application for a permit to construct and operate a new municipal solid waste facility (Facility) in Caldwell County. Following a contested-case hearing, the Texas Commission on Environmental Quality (Commission) issued a final order granting 130 EP's application. TJFA, LP; Environmental Protection in the Interest of Caldwell County; James Abshier; and Bryon Friedrich (collectively, TJFA) filed suit for judicial review of the Commission's order. The district court rendered judgment upholding the permit. We will affirm.

BACKGROUND

We begin with an overview of the relevant statutory framework, the Solid Waste Disposal Act (the Act). The Act directs the Commission to "safeguard the health, welfare, and physical property of the people and to protect the environment by controlling the management of solid waste." Tex. Health & Safety Code § 361.002(a). To accomplish this purpose, the Commission may "require and issue permits authorizing and governing the construction, operation, and maintenance of the solid waste facilities used to store, process, or dispose of solid waste under this chapter." Id. § 361.061. The Act also grants the Commission authority to prescribe the form and requirements of the permit application and the procedure for processing it. Id. § 361.064(a).

The Commission has exercised this authority and promulgated rules prohibiting anyone from storing, processing, removing, or disposing of solid waste without a permit or other authorization from the Commission. See 30 Tex. Admin. Code § 330.7 (2021) (Tex. Comm'n on Env't Quality, Permits Required). The Commission's rules divide the application into four parts and specify the contents of each. See id. §§ 330.57(a) (2021) (Tex. Comm'n on Env't Quality, Permit and Registration Applications for Municipal Solid Waste Facilities) ("The application for a municipal solid waste facility is divided into Parts I-IV."), .59 ("Contents of Part I of the Application"), .61 ("Contents of Part II of the Application"), .63 ("Contents of Part III of the Application"), .65 ("Contents of Part IV of the Application"). Generally, an application will not be declared administratively complete—meaning that it is ready for review and decision by the Commission—until the applicant has submitted all the required materials. Id. § 330.57(a); see Tex. Health & Safety Code § 361.068 ("Administratively Complete Application"). However, the Act gives the Commission discretion to process an application through a different, two-step procedure. The Commission "in its discretion may, in processing a permit application, make a separate determination on the question of land-use compatibility, and, if the site location is acceptable, may at another time consider other technical matters concerning the application." Tex. Health & Safety Code § 361.069. If the Commission decides to employ this procedure, the applicant "shall submit a partial application consisting of Parts I and II of the application," which the executive director will "process ... to the extent necessary to determine land-use compatibility alone." 30 Tex. Admin. Code § 330.57(a). If the Commission determines the land is suitable for use as a landfill, the applicant then submits the remainder of the application.

In September 2013, 130 EP applied for a permit to construct the Facility and requested a land-use-only determination. The Commission declared the application—consisting of Parts I and II—administratively complete on September 23, 2013. Three months later, the Caldwell County commissioners adopted an ordinance prohibiting the process or disposal of solid waste in most of the County, including the proposed site of the Facility (Disposal Ordinance). The Commission subsequently determined that the site was acceptable for use as a landfill, and 130 EP filed a complete application in February 2014. The executive director declared Parts III and IV administratively complete on February 28, 2014. After technical review, the executive director recommend that the Commission grant the application and prepared a draft permit. At 130 EP's request, the Commission referred the application to the State Office of Administrative Hearings for a contested-case hearing.

The case was assigned to two administrative law judges (ALJs), who admitted TJFA in opposition to the application. The ALJs conducted a final hearing on the case from August 15–26, 2016. TJFA argued that Section 363.112 of the Act barred 130 EP's application because the Disposal Ordinance prohibits processing or disposal of solid waste in the proposed location. See Tex. Health & Safety Code § 363.112(c) – (d). As alternate grounds, TJFA argued that 130 EP's geology expert had destroyed evidence, moved to strike his conclusions from 130 EP's application, and argued that the application failed to meet the Commission's standards concerning surface water drainage, land-use compatibility, and flood protection. Whether 130 EP adequately addressed the effect the Facility would have on the Site 21 Dam and Reservoir—located approximately 3,000 feet downstream—was an especial point of contention. The ALJs subsequently issued a 211-page proposal for decision (PFD) recommending that the Commission grant the permit as proposed in the draft permit with three suggested changes:

• The Permit Boundary should be expanded to include the entire length of the access road from the entrance at US 183 to the entrance of the facility at the current Permit Boundary.

• The Permit Boundary should be expanded to include the entire screening berm.

• The operating hours for the Facility should be set at the standard hours provided in 30 TAC § 330.135.

The Commission voted to accept the PFD but rejected the first two changes. In September 2017, the Commission issued a final order that adopted almost all the ALJs' findings and conclusions of law, explained why it rejected others, and granted the permit. TJFA sought judicial review of the order in Travis County district court. See id. § 361.321(a) ("A person affected by a ruling, order, decision, or other act of the commission may appeal the action by filing a petition in a district court of Travis County."). The district court affirmed the Commission's order, and this appeal followed.

ANALYSIS

TJFA challenges the district court's judgment affirming the Commission's grant of a permit to 130 EP in five issues. Specifically, TJFA argues that the Commission erred by granting the permit because the Commission cannot grant a permit for land covered by the Disposal Ordinance; the application's geological report is unreliable; the Commission unlawfully rejected the ALJs' findings and conclusions; the application omitted crucial information regarding changes in surface water drainage patterns and flood protection; and the Commission's determination that the Facility is compatible with the Site 21 Reservoir and Dam is unsupported by substantial evidence.

Standard of Review

In a suit for judicial review of a final order under the Act, "the issue is whether the action is invalid, arbitrary, or unreasonable." Id. § 361.321(e). The "invalid, arbitrary, or unreasonable" standard incorporates the entire scope of review allowed by the "substantial evidence" standard codified in the Administrative Procedure Act. See Texas Comm'n on Env't Quality v. Exxon Mobil Corp. , 504 S.W.3d 532, 535 n.1 (Tex. App.—Austin 2016, no pet.) ; Citizens Against the Landfill in Hempstead v. Texas Comm'n on Env't Quality , No. 03-14-00718-CV, 2016 WL 1566759, at *1 (Tex. App.—Austin Apr. 13, 2016, no pet.) (mem. op.). Under that standard, we will reverse or remand a case for further proceedings "if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions" are:

(A) in violation of a constitutional or statutory provision;

(B) in excess of the agency's statutory authority;

(C) made through unlawful procedure;

(D) affected by other error of law;

(E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole; or

(F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Tex. Gov't Code § 2001.174(2). We apply this analysis without deference to the district court's judgment. See Texas Dep't of Pub. Safety v. Alford , 209 S.W.3d 101, 103 (Tex. 2006) (per curiam) ; Jenkins v. Crosby Indep. Sch. Dist. , 537 S.W.3d 142, 149 (Tex. App.—Austin 2017, no pet.).

Effect of the Disposal Ordinance

We begin with whether the Disposal Ordinance bars 130 EP's application as a matter of law. The Act prohibits the Commission from granting an application for a permit in any location where processing or disposing of municipal solid waste is prohibited by ordinance unless the application is pending before the Commission when the ordinance is passed. See Tex. Health & Safety Code § 363.112(c) – (d).¹ The Commission concluded that the Disposal Ordinance did not prohibit granting the permit because 130 EP's application for a land-use-only determination was pending before the Commission at the time Caldwell...